Stage 6: The Construction Contract

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Construction Contract

Drawings and specifications are given to a builder or a number of builders. In general it is wise to have selected the builder before this point and to have carefully checked out their references. The advantage of meeting the builders before hand is to see how they react to the general nature of the project. With my experience it is very easy to see if a certain builder may be incapable of meeting the particular requirements of the project. This interviewing process is very important and I can quickly detect whether or not the builder is appropriate. For this reason, I am not entirely in favour of the bidding process. It inherently forces the builder to seek the lowest price and where possible to install cheap products or to cut corners. It is a process however, that does provide for alternative pricing to compare one builder with another. In this case, the specifications must be even more precise. I cannot overemphasize the choice of the right contractor for the proposed work. However, if the contractor is pre-qualified, then they can often make suggestions and be involved in the total process.

In the second stage of the process, a contract is drawn up, preferably using one of the standard contract documents provided by the contractors' association. These cover the responsibilities of the contractor as well as the client. There are three formats for building: fixed sum, cost-plus and project management. The advantages and disadvantages will be discussed with myself, and then the appropriate type selected. The contract will not only cover items regarding the cost of the building according to what is provided in the drawings and specifications, but also the schedule. Builders are frequently not on schedule. Often they take on too many projects that spread themselves too thin and near the end of the project, things do not get completed. The nature of the schedule and the legalities for failing to meet deadlines should carefully be determined. With the contract signed and payment schedule clearly understood, the project is ready to begin.

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